308 ITR 199 (Del) and CIT v. Spice Distribution Ltd.

374 ITR 30High Court2015#4208 most cited

What is 308 ITR 199 (Del) and CIT v. Spice Distribution Ltd. authority for?

Expenditure on advertisement and sales promotion is generally treated as business expenditure allowable under section 37 of the Income-tax Act. The Assessing Officer cannot treat revenue expenditure as deferred revenue expenditure as the Act does not have such a concept.

28

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2017 to 2024.

Also referred to as

CIT v. Spice Distribution Ltd. · section 37 · advertisement expenditure · sales promotion expenditure · business expenditure · deferred revenue expenditure · profit earning machinery · bright line test

Sections most often in play

Section 143(3)Section 260ASection 37Section 37(1)

Issues it is cited on

profit split methodbright line testamp expendituresection 80hhc(3)test of enduring benefitsection 92fprotective assessmentsection 80hsection 145asection 92bsection 80hhcspecified domestic transaction

Judgments citing 308 ITR 199 (Del) and CIT v. Spice Distribution Ltd.

M/S Pepsico India Holdings Pvt. Ltd., Gurgaon vs. ACIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

ITA 4517/DEL/2016[2010-11]Status: DisposedITAT Delhi03 Dec 2018AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Respondent: Mr. H.K. Chaudhary, CIT-DR
Section 115JSection 145ASection 271(1)(c)

…ifficult to hold that the expenses were incurred for setting the profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Ba…

M/S Pepsico India Holdings Pvt. Ltd., Gurgaon vs. ACIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

ITA 4516/DEL/2016[2010-11]Status: DisposedITAT Delhi03 Dec 2018AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Respondent: Mr. H.K. Chaudhary, CIT-DR
Section 115JSection 145ASection 271(1)(c)

…ifficult to hold that the expenses were incurred for setting the profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Ba…

M/S. Pepsi Foods Limited, Gurgaon vs. ACIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

ITA 1044/DEL/2014[2009-10]Status: DisposedITAT Delhi03 Dec 2018AY 2009-10

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Respondent: Mr. H.K. Chaudhary, CIT-DR
Section 115JSection 145ASection 271(1)(c)

…ifficult to hold that the expenses were incurred for setting the profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Ba…

Pepsi Foods Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

In the result, all the appeals of the assessee are treated as partly allowed

ITA 2511/DEL/2013[2008-09]Status: DisposedITAT Delhi03 Dec 2018AY 2008-09

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Respondent: Mr. H.K. Chaudhary, CIT-DR
Section 115JSection 145ASection 271(1)(c)

…ifficult to hold that the expenses were incurred for setting the profit earning machinery in motion or not for earning profits.". (Also see, CIT v. Spice Distribution Ltd., I. T. A. No. 597 of 2014, decided by the Delhi High Court on September 19, 2014 [2015] 374 ITR 30 (Delhi) and CTT v. Salora International Ltd. [2009] 308 ITR 199 (Delhi). Accepting the parameters of the "bright line test" and if the said para meters and tests are applied to Indian companies with reputed brands and substantial AMP expenses would lead to difficulty and unforeseen tax implications and complications. Tata, Hero, Mahindra, TVS, Ba…

Niit Online Learning Ltd vs. ACIT, Circle-13(1)

The appeal of the assessee stands allowed for statistical purposes

ITA 647/DEL/2005[2001-2002]Status: DisposedITAT Delhi20 Nov 2017AY 2001-2002

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastavaay: 2001-02 M/S Niit Online Learning Ltd., Vs Asstt.Commissioner Of Income Tax, B-234, Okhla Industrial Area, Circle 13(1), Phase-1, New Delhi. New Delhi-110020 (Pan: Aabcn1113B) (Appellant) (Respondent) Appellant By : Shri Ajay Vohra, Sr. Adv. Shri Gaurav Jain, Adv. Respondent By : Shri R.C. Danday, Sr. Dr

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri R.C. Danday, Sr. DR
Section 143(3)

…erous decisions wherein it has been held that advertisement expenditure for promotion of a product is not capital in nature and noticeable amongst them is the judgment of the Hon’ble Delhi High Court in the case of CIT vs. Spice Distribution Ltd reported in 374 ITR 30 (Del). Further, it is also a settled judicial precedent that no disallowance u/s 40A (2) can be made without the AO recording a finding that the expenditure incurred was excessive or unreasonable having regard to the market value of the goods or services, the legitimate business needs and the benefit derived by or accruing to the assessee there…

M/S.. Synthes Medical Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

ITA 6006/DEL/2013[2008-09]Status: DisposedITAT Delhi31 Mar 2017AY 2008-09

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

Section 143(2)Section 143(3)Section 32(1)Section 37(1)

…d counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld. Senior DR submitted that the assessee has not furnished the detail…

M/S.. Synthes Medical Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

ITA 6005/DEL/2013[2007-08]Status: DisposedITAT Delhi31 Mar 2017AY 2007-08

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

Section 143(2)Section 143(3)Section 32(1)Section 37(1)

…d counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld. Senior DR submitted that the assessee has not furnished the detail…

DCIT, New Delhi vs. M/S. Synthes Medical Pvt. Ltd., New Delhi

In the result, both the appeals for assessment years 2007-08 and 2008-09 filed by the assessee are partly allowed for statistical purposes and the appeal filed by the Revenue is dismissed

ITA 5807/DEL/2013[2008-09]Status: DisposedITAT Delhi31 Mar 2017AY 2008-09

Bench: Sh. Sudhanshu Srivastava & Sh. O.P. Kant

Section 143(2)Section 143(3)Section 32(1)Section 37(1)

…d counsel submitted that the ad-hoc disallowance of revenue expenditure is not in accordance with law. He relied on the judgment in the case of CIT Vs. The Salora International Ltd. reported in 308 ITR 199 (Del) and CIT Vs. Spice Distribution Ltd. reported in 374 ITR 30 (Del) to submit that expenditure incurred on sales promotion is revenue expenditure. It was contended that there is no concept of deferred revenue expenditure under the Act as held in the case of CIT Vs. Citi Financial Consumer Fin. Limited, 330 ITR 29. 5.2 On the contrary, the Ld. Senior DR submitted that the assessee has not furnished the detail…